After five years as Russia's leader, career KGB man Vladimir Putin has finally acquired the aura of an American politician. George Bush might notice the change this week when the two men sit down together in Slovakia's capital, Bratislava. They have a long list of urgent issues to discuss, from Iran's nuclear ambitions and the former Warsaw Pact nations' stampede into Europe to the future of Central Asia. There's one problem: the American politician Putin has come to resemble is Richard Nixon, prowling the White House corridors, isolated and increasingly paranoid.

The image is a troubling one, with unsettling implications not only for the United States, but also Russia, Europe and their neighbors. Make no mistake: Putin's paranoia is not the dark stuff of Russian history--Joseph Stalin, say, who turned on his intimates and saw an enemy in every shadow. Putin's grows out of his native cautiousness, compounded by the experience of his first term in office: a government that more often than not simply doesn't work; men of power within his regime who pursue their own interests, often covertly; corruption and incompetence cascading throughout every ministry and state office in the land.

Putin's response has been to draw inward. At home, he relies on an increasingly small group of advisers. He has concentrated more and more power in his own hands--yet he often dares not use it. He once told NEWSWEEK that he thinks of power as a "razor in the hands of a drunk," who, flailing around, risks doing damage he can neither predict nor undo. Not fully knowing who his allies or enemies might be, and trusting very few, he goes slow--delaying decisions, seeing how events play out and thus paralyzing government. Everything in Russia increasingly depends on one man, says TV commentator Vladimir Posner. "It's all Putin."

Abroad, Putin sees evidence of "the West" hemming Russia in. The latest instance: Ukraine's "Orange Revolution," taking a country that has long been known as "Little Russia" out of Moscow's orbit and toward membership in NATO and the European Union. More and more, he interprets Russia's interests in the world as leaders did before him--as a classically Russian "zero-sum" game, in which Moscow's interests are very separate from the alien West's.

It is very much a sign of the times that, as George Bush prepared for this week's state visits to Europe, the most problematic element by far was how to handle Putin, even more difficult than persuading Paris or Berlin to take a greater role in Iraq or finding common ground on Iran. "It's a huge moment," said a senior White House official, adding that preparations are so sensitive that the administration agreed to the Kremlin's request to downscale the event from a "summit" to a "meeting." Nor does anyone expect a cozy confab as in Slovenia four years ago, when Bush famously looked into Putin's eyes and saw the "soul" of a man with whom he could do business. The two still profess friendship. Russian officials have openly derided the recent elections in Iraq. Reversing previous policy, Moscow recently played a key role in blocking U.S. plans to deploy AWACS reconnaissance planes in Kyrgyzstan, useful for military operations in nearby Afghanistan. Only last week, days before President Bush climbed aboard Air Force One, Moscow made clear that it would continue business as usual with Iran--pointedly dismissing U.S. concerns that Tehran was seeking nuclear weapons.

Interpreting what the Russian president is thinking, and where he is taking his country, has degenerated into the sort of "Kremlinology" that characterized the Soviet era. Ironically, Putin himself may suffer something of the same malady. He, too, often appears unsure how to read the politics of his own government and country. His circle of advisers has narrowed to two tiny groups, each numbering about six members--three of them belonging to both. One group gathers on Mondays to weigh economic and social policy, and on Saturdays the other discusses national security. On big decisions, especially matters of foreign policy and top-level appointments, even those insiders are regularly shut out. Only four people knew of his decision last year to name Mikhail Fradkov as prime minister, an obscure bureaucrat toiling away in Brussels.

Hardly anyone dares to contradict Putin. Everyone saw what happened to Andrei Illarionov in late December, when he objected to Putin's decision to appoint, rather than elect, provincial governors. "Competition in politics is just as important as competition in the economy," Putin's top economic adviser told a packed press conference. "Limiting competition--in all aspects of life--leads to one thing: stagnation." Less than a week later he was replaced as Russia's G8 representative.

Isolation is but one hallmark of Putin's current paranoia. Another is the degree to which he is hostage to feuding within his own administration. To the outside world, Putin looks all-powerful. He has consolidated more and more state control in his own hands. Parliament has become his tool, dominated by his party, where personal loyalty counts among all things. But a Russian president, like the tsars of old, is also a prisoner of court politics. And it can be a dangerous game, with barons powerful in their own right vying for his backing for policies and interests they hold dear. In Putin's case, the inner circle is split into two feuding factions: the siloviki ("men of power") and the "liberals." The siloviki are a tight-knit band of mostly military and KGB veterans who dominate the country's security and intelligence ministries and believe, more or less, in state control of the country's political and economic life. The liberals believe more in Western-style market reforms, though politically they are far from progressive. They include the likes of Vladislav Surkov, who is said to be a leader in efforts to fix the Constitution so Putin can rule the country indefinitely. (President-for-life, anyone?) At first the idea was to hold a national referendum to shift the balance of power from the president to the prime minister, a position that would exempt Putin from term limits. A team of lawyers in St. Petersburg was assigned to draft a resolution. But now the Kremlin has decided the plan is too risky. Instead the St. Petersburg team has been told to explore ways to do it without a referendum--by next year, if possible.

Neither faction has any love for democracy, which to their mind only makes it more difficult to govern a country that is already hard enough to rule. (The chaos of the 1990s under the democratic reforms of Boris Yeltsin is a constant reminder of the limitations of too much economic and political freedom.) A case in point: as of Jan. 1, Putin's rubber-stamp legislature scrapped the country's Soviet-era subsidy system for pensioners and military personnel. Street protests erupted in nearly 100 cities over the loss of basics like free public transportation. The Kremlin quickly allocated more than $4 billion to placate the pensioners, but the upheaval continues. The Duma's approval rating plunged to 3 percent, and the president's own popularity has sunk from 65 percent a year ago to 43 percent now. Putin is a changed man, says one close adviser: "He's lost his decisiveness. It seems like he's in a quiet panic."

From Putin's perspective, his world looks to be falling apart. It began last September, when Chechen terrorists stormed a grade school in southern Russia, and a botched rescue left more than 300 hostages dead. Corrupt local officials and police, possibly bribed, allowed the terrorists to travel freely to the school. When Putin seized on that as a pretext to replace regional governors with his own men--less prone to corruption and therefore more effective, he argued--many Russians saw it as evidence of something deeper. "He trusts no one," says Andrei Kolesnikov, author of a recent Putin biography.

The sense of embattlement grew worse in December, when Viktor Yushchenko swept to victory in Ukraine's presidential election, despite massive vote fraud engineered by the Moscow-backed ruling party and all the support--personal and financial--that Putin could muster for his opponent. The siloviki blame Washington. Events in Ukraine, as in Georgia before it, are the product of a vast U.S. and Western European "conspiracy" to isolate and "contain" Russia, goes the argument. But others pin the fault on Putin's own advisers. They say the Kremlin's propagandists did so masterful a job of packaging twice-convicted felon Viktor Yanukovych as a viable presidential candidate that Putin bought the notion. "It's ludicrous to think of this as an American plot--we're not that good," says a senior U.S. official. "Nothing could be as devastating as what they've done to themselves."

The question is to what degree Putin understands that. Enfolded within his tight cocoon of yes men, cleaving to his faith in what Russians call "vertical power" and "managed democracy," it seems unlikely that he understands where Russia is going wrong. A system without checks and balances--whether of government, media or social freedoms--eventually collapses of its own inflexibility. Will George Bush bring up this prickly topic in Bratislava? "Vladimir makes a lot of decisions, and I make a lot of decisions," he told reporters last week. "And I like to talk about, well, why did you do this, or why did you do that? And I will remind him that if he intends to continue to look West, that we believe in Western values." Chief among those is openness and pluralism, the opposite of paranoia. It will be interesting to see how Putin responds.